Summary: Ancillary revenue in hotels (income from anything beyond the room rate) remains one of the most underused ways to grow in hospitality. Whether you upsell during check-ins with a guest kiosk or during late-night food and beverage sales with a grab and go kiosks, add-ons provide a recurring opportunity for additional revenue each time a guest visits.
We’ll cover:
- What ancillary revenue means for hotels
- 15 concrete ancillary revenue ideas any hotel property can use
- How Stayntouch’s cloud property management system (PMS) automates the add-on sales process, from mobile upselling to task fulfillment, without adding work for staff
- FAQs about ancillary revenue for hotels
What Is Ancillary Revenue in the Hotel Industry?
Ancillary revenue is income a hotel generates from anything beyond the base room rate, such as:
- Food and beverages
- Spa treatments
- Parking
- Early check-in or late check-out
- Room upgrades
- Event space
- Retail
- And more
It’s the hotel equivalent of an airline charging for a checked bag or extra legroom. While your main offering is the room, the surrounding services are where you can capture a larger share of your profit.
Despite the opportunity, hotels have historically undersold these services compared to other travel sectors. According to WhiteSky Hospitality, U.S. hotels sold approximately $18.9 billion in ancillary products and services in 2022, which is just 10-15% of total hotel revenue, compared to the airline industry’s $148.4 billion, or approximately 20% of revenue. While that’s a marked increase from a decade ago, ancillary services are still being treated as an afterthought.
That’s a wasted opportunity for two reasons. First, ancillary revenue carries a much higher margin than room revenue, since most of the fixed costs of operating the property are already covered. Second, when done well, offering the right add-on at the right moment doesn’t feel like an upsell at all. Instead, it feels like a better service. EyeforTravel’s research on ancillary revenue in hospitality points to a sound conclusion: successful ancillary strategies are data-driven, personalized, and delivered through mobile.
Why Hotel Ancillary Revenue Strategies Depend on Technology
Cloud technology changes what’s possible with ancillary services in hotels in three ways:
- It consolidates guest data, such as preferences, stay history, and spending patterns, into a single guest profile, so hotels can build customer segments.
- It moves the sales process off the front desk and onto the guest’s own device, where offers can be reviewed and purchased without time pressure or a staff member standing over their shoulder.
- It automates the operational side of fulfillment, so a hotel selling more add-ons doesn’t have to do more manual data entry.
The upside has been well documented. Targeted upsell offers can convert at 15-20%, according to Mashable. For a 150-room hotel running at 60% occupancy, that can add roughly $65,000 in annual revenue. When Fontainebleau Miami Beach rolled out Stayntouch’s cloud-based mobility platform, the hotel saw guests taking advantage of it within minutes of go-live, and return on investment (ROI) on extended-stay and late-checkout revenue exceeded 140% in the first 30 days.
15 Ancillary Revenue Ideas to Try at Your Property
Not every idea below is suitable for every property, but between them, they cover most of the ancillary revenue opportunities available to independent hotels, boutique properties, and larger chains.
- Paid room upgrades: You can offer upgrades via mobile or email before guests arrive, so they have more time to consider them, rather than relying on a front desk pitch at check-in.
- Monetized early check-in and late check-out: Let guests pay to guarantee flexible arrival and departure times instead of leaving it to chance or staff direction.
- Attribute-based selling: Sell specific room features, such as a balcony, an upper floor, or a corner room, as standalone paid add-ons rather than bundling them into a flat upgrade tier.
- Restaurant promotion: Drive covers by promoting the on-site restaurant directly to guests, with special set menus or tasting experiences that also attract local diners.
- Spa and wellness packages: Offer single treatments or full-day packages, with seasonal or couples’ packages promoted through automated guest messaging.
- Airport and ground transportation: Offer transfers via an in-house fleet or a commission-based partnership with a local car service.
- In-room amenities, pet-friendly options, and occasion packages: Sell upgraded toiletries, champagne and roses for anniversaries, or a cake and balloons for birthdays as add-ons guests can select in advance. You can also generate revenue through premium pet packages that include treats, bowls, beds, toys, or walking services.
- Event and meeting space rental: Market smaller event rooms for local gatherings, reunions, or off-site corporate meetings, not just large weddings and conferences.
- Alternative space monetization: Repurpose underused areas, such as a lobby lounge as a daytime co-working space or a rooftop for a pop-up dinner, or a terrace for private events.
- Hotel-hosted classes and experiences: Turn an in-house chef, sommelier, or florist into a bookable class or workshop for guests and locals.
- Bundled packages: Combine multiple add-ons, such as a spa treatment, dinner reservation, and late checkout, into a single priced package for occasions like anniversaries or holidays.
- Retail and gift shop sales: Stock a small retail selection of local products or branded hotel items and consider making select items purchasable online.
- Local experience partnerships: Partner with local tour guides, instructors, or activity providers to offer bookable experiences without hiring in-house staff to run them.
- Day-use and hourly bookings: Sell unused rooms in smaller time blocks to remote workers, travelers with long layovers, or day-use spa guests.
- Passerby and walk-in retail: Let non-guests purchase grab-and-go food, drinks, and retail items in the lobby without requiring a room reservation.
How to Increase Hotel Ancillary Revenue
Once you know which ancillary services fit your property, how you roll them out is important. Start with the easiest offerings, such as paid upgrades, early check-in, and late check-out, before you focus on more complex ones. Look at your guest data to see what’s already been requested informally, and check what comparable hotels are offering that you aren’t.
From there, segment guests by trip purpose, source market, or recorded preferences rather than sending every guest the same generic list of offers. Finally, automate wherever possible. Manual upselling depends on your staff remembering to make the pitch during a busy shift, while automated offers go out consistently, without adding to anyone’s workload.
How Stayntouch Automates Ancillary Revenue
Stayntouch turns the ideas above into automated, hands-off revenue streams. Here’s how our platform supports and automates ancillary revenue generation.
Automated Mobile and Kiosk Upselling
Through its Zest Web (mobile) and Zest Station (kiosk) platforms, Stayntouch automatically sends targeted offers for room upgrades, amenities, and monetized early check-ins or late check-outs directly to a guest’s smartphone or a self-service kiosk.
Guests can enhance their stay at their own pace without feeling pressured by front-desk staff. Because the system is inventory-aware, sold-out rooms and amenities are automatically hidden to prevent overbooking. This approach is highly effective. Some Stayntouch clients have earned up to a 240% ROI in quarterly revenue based entirely on automated mobile upgrades and offers.
Data-Driven Personalization
To make automated offers convert, Stayntouch draws on data collected in each guest’s Stay Card to build guest profiles. By segmenting guests into personas based on behavior and preferences, the system delivers personalized, image-based offers at the right moment. This is the same data-driven, segmented approach that ancillary revenue research consistently points to as most effective.
Attribute-Based Selling and Add-on Bundling
Stayntouch supports attribute-based selling, letting guests pay to secure specific room features like a balcony or an upper floor. Hoteliers can also combine multiple upgrades, such as late check-out, parking, and a dining credit, into multi-item Add-On Groups. You can use the Bundle with Price feature to roll the cost of a package and its taxes directly into the nightly room rate for a simpler final invoice.
Day Use, Hourly Bookings, and Lobby Monetization
Stayntouch automates the management of day use and hourly reservations, letting hotels rent out rooms to remote workers, travelers with long layovers, or day-use spa guests, with the system automatically adding buffer time for housekeeping to turn rooms around without double-booking. For kiosks, Grab-and-Go and Passerby functionality lets walk-in non-guests purchase retail or food and beverage items and pay separately at the terminal, turning the lobby into an automated retail channel.
Automated Task Fulfillment
When a guest purchases an add-on, Stayntouch can automatically generate and schedule the corresponding task for the right department. If a guest adds a Romance Package, for instance, the system automatically alerts staff to deliver champagne and chocolate-covered strawberries on the correct date. This eliminates manual dispatch from the front desk entirely.
Comprehensive Tracking and Reporting
Stayntouch’s Reporting Module tracks every room upsell, amenity purchase, and early/late checkout conversion, posting targeted and actual upsell revenue directly to the main PMS dashboard in real time. This keeps the entire team focused on the property’s revenue goals without pulling manual reports.
Third-Party Upselling and Marketing Integration
Thanks to its open-API architecture, Stayntouch integrates with a wide range of specialized revenue and marketing platforms. Pre-arrival upselling engines like Oaky, ROOMDEX, Sponteous, Upsell Guru, and DigitalGuest let guests bid on upgrades or purchase add-ons before they even arrive.
On-property, integrations with mobile ordering and payment platforms like FETCH Technology Group, GoTab, and Woby let guests order room service or poolside drinks from their phones, with charges posting automatically to the guest folio. For other campaigns, integrations with Ascent360 and Sojern apply data-driven and artificial intelligence (AI)-driven marketing to increase direct bookings and ancillary spend. Additionally, Way helps hotels build and manage bookable guest experiences without adding more work for your staff.
Increase Hotel Ancillary Revenue with Stayntouch
Increasing hotel ancillary revenue is about creating smarter guest experiences that generate additional revenue naturally throughout the stay, without adding more work for your staff. A cloud-native PMS makes that possible by automating upgrades, personalizing offers, simplifying operations, and connecting every department around the guest journey.
Stayntouch helps hotels modernize these processes through mobile-first workflows, automated upselling, flexible integrations, and operational visibility. The result is a smoother guest experience, a more empowered staff, and new revenue opportunities that continue after the reservation is booked.
Ready to maximize your hotel’s ancillary revenue? Discover how we help hotels automate guest engagement, streamline operations, and unlock new revenue opportunities with a cloud-native PMS. Book a demo today.
Frequently Asked Questions About Ancillary Revenue for Hotels
What counts as ancillary revenue for a hotel?
Ancillary revenue is any income generated beyond the base room rate. Common examples of ancillary services in hotels include food and beverage, spa treatments, parking, early check-in or late check-out, room upgrades, event space rental, retail, and transportation. These often have higher margins than room revenue.
How can technology increase ancillary revenue for hotels?
Cloud and mobile technology let hotels move ancillary offers off the front desk and onto the guest’s phone, where they can browse and purchase. Combined with guest data, this allows hotels to automatically personalize offers.
What are the easiest ancillary revenue ideas for hotels to start with?
Paid early check-in, late check-out, and room upgrades are among the easier hotel ancillary revenue ideas to start with. They don’t require new amenities or vendor partnerships.
